CRA audit teams have become more interested with business audits in the past 18 to 24 months. Their audit activities have increased significantly in frequency and they are becoming more aggressive in their audit techniques.

CRA auditors have also been denying many claims for input tax credits (ITC), which can increase the GST/HST a company has to pay when the returns are filed, unless sufficient documentation can be provided to them.

It might be less costly in some cases to pay a higher tax rate demanded by CRA than to track & provide the documentation requested by them.

There are several factors that explain CRA’s aggressive stand towards GST/HST Audit. Recent federal budgets have increased money allocated to CRA for audits. As a result, CRA has hired hundreds of auditors with up-to-date technical skills who are very skilled in technology, and data-mining capabilities.

SJ Chartered Accountant, a team of accountants & tax experts in Mississauga, Etobicoke & Toronto suggests that it’s very important for businesses to ensure correct HST returns are filed and proper back up documentation is kept in case of future CRA audits.